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ASIA CREDIT CLOSE: Thai bonds tighten; Pertamina spurs Indonesia credits
May 22, 2014 / 8:57 AM / 4 years ago

ASIA CREDIT CLOSE: Thai bonds tighten; Pertamina spurs Indonesia credits

HONG KONG, May 22 (IFR) - Thailand’s hard currency bonds continued to tighten on Thursday despite the continued fall in the Thai baht as political rivals failed to agree on the appointment of an interim prime minister.

Yields on Thai hard currency bonds tightened 1bp-2bp as investors bought on dips, which they have been doing since martial law was announced on Tuesday.

Spreads on Ratchaburi Electricity’s 2019s continued to narrow to 163bp/158bp since yesterday, according to a Singapore-based trader.

“One of the reasons for the absence of a big move is that foreign ownership is really small, like about 9%,” according to another trader. “Thai investors are also used to coups.”

Meanwhile, Indonesia’s Pertamina’s launch of a 30-year US dollar bond this afternoon prompted Indonesia’s sovereign bonds to rise in price. The market views initial guidance of a 6.7% yield to be tight, and expects the final spread on the bonds to be tighter, said another trader.

The price of Indonesia’s 2044s rose to as high as 116 from 114.75 before settling at the 115 mark, said a different Singapore-based trader. Perusahaan Gas Negara’s 2024s also increased, rising to 99.50-100.

Indian bonds traded unchanged today as market participants anticipate new supply. India’s Syndicate Bank announced a roadshow for a US dollar Reg S deal yesterday.

“I wouldn’t chase it tighter, it looks fair value for now,” said another Singapore-based trader.

State Bank of India’s 5-year CDS, a proxy for Indian credit sentiment, was lower at around 200bp.

Despite event-driven moves, Asian credit overall had little news to absorb. One trader said dealers were taking cues from equity indexes and macro events.

frances.yoon@thomsonreuters.com;

neha.dsilva@thomsonreuters.com

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